Exhibit 99.1
Allen Organ Company
150 Locust Street Macungie, PA 18062
Phone: 610-966-2200
NEWS RELEASE - FOR IMMEDIATE RELEASE
NASDAQ-AORGB
February 13, 2004 From: Nathan S. Eckhart, Vice President-Finance
Consolidated sales for the year ended December 31, 2003 for Allen Organ
Company were $60,788,058 as compared with $67,739,548 for the same period of
2002. The consolidated net income was $1,396,896 or $1.20 per share for
2003, compared to $2,685,357 or $2.29 per share for 2002.
Sales for the fourth quarter of 2003 were $19,255,623 as compared to
$18,652,619 in 2002. Net income for the fourth quarter of 2003 was
$1,365,679 or $1.18 per share, compared to $215,822 or $0.18 per share for
2002.
Musical Instruments segment sales decreased approximately $1,067,000 to
$5,174,454 and $4,561,000 to $20,381,904 during the three months and year
ended December 31, 2003, respectively, when compared to the same periods in
2002. These decreases were primarily due to lower order volume, which
management attributes to the overall economic slowdown. This segment
incurred operating losses of approximately $(145,000) and $(766,000) during
the three months and year ended December 31, 2003, respectively, compared to
operating income of approximately $217,000 and $2,017,000 in the same periods
in 2002. These decreases in operating results are primarily due to lower
sales volume over which to absorb fixed operating costs and higher pension
expense in 2003. The Company has taken steps to reduce this segment's costs.
The Data Communications segment sales increased approximately $2,073,000 to
$12,955,373 and decreased $514,000 to $36,022,256 during the three months and
year ended December 31, 2003, respectively, when compared to the same periods
in 2002. The increase during the fourth quarter of 2003 is attributable to
higher order volume. Operating income increased to approximately $1,368,000
and $2,474,000 during the three months and year ended December 31, 2003,
compared to operating income of $108,000 and $2,106,000 in the same periods
in 2002, due to higher sales volume during the fourth quarter of 2003 and
favorable product mix changes. Operating income for 2003 was offset in part
by increased costs incurred in connection with the acquisition and
integration of Avail Networks in July 2003. This segment's business is more
dependent on larger individual sales that may cause sales levels to fluctuate
in future quarters'. Such sales, as well as product mix changes, could
affect future operating results.
Electronic Assemblies segment sales decreased during the three months and
year ended December 31, 2003, when compared to the same periods in 2002 due
to lower order volume from the Company's contract manufacturing customers
that were negatively affected by the economic slowdown. Audio Equipment
segment sales increased slightly during the three months and year ended
December 31, 2003, when compared to the same periods in 2002.
Investment income for the three months and year ended December 31, 2003 was
lower than the same periods in 2002 due to lower rates of return available on
invested funds.
The effective tax rate for the year ended December 31, 2003 decreased due to
tax credits and other non-taxable items.
CONSOLIDATED SALES AND EARNINGS
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2003 2002 2003 2002
Sales $19,255,623 $18,652,619 $60,788,058 $67,739,548
Income From Operations 1,131,002 15,332 918,692 3,106,847
Non-Operating Income, Net 138,677 253,490 403,204 689,510
Income Tax (Benefit)
Provision (96,000) 53,000 (75,000) 1,111,000
Net Income 1,365,679 215,822 1,396,896 2,685,357
Earnings Per Share-Basic
and Diluted $1.18 $0.18 $1.20 $2.29
Average Diluted Shares
Outstanding 1,158,179 1,170,191 1,160,481 1,170,191
Allen Organ Company and its subsidiaries manufacture and distribute
electronic keyboard musical instruments, audio equipment, electronic
assemblies, and data communication equipment for the domestic and
international markets.
Factors that May Affect Operating Results:
The statements contained in this press release that are not purely historical
are forward looking statements, including statements regarding the Company's
expectations, hopes, intentions or strategies regarding the future. Forward
looking statements include: statements regarding future products or product
development; statements regarding future research and development spending
and the Company's marketing and product development strategy, statements
regarding future production capacity. All forward looking statements
included in this press release are based on information available to the
Company on the date hereof, and the Company assumes no obligation to update
any such forward looking statements. Readers are cautioned not to place
undue reliance on these forward looking statements, which reflect
management's opinions only as of the date hereof. Readers should carefully
review the risk factors described in other documents the Company files from
time to time with the Securities and Exchange Commission, including the
Annual Report on Form 10-K for the year ended December 31, 2002 and its
Quarterly Reports on Form 10-Q. It is important to note that the Company's
actual results could differ materially from those in such forward looking
statements. Some of the factors that could cause actual results to differ
materially are set forth below.
The Company has experienced and expects to continue to experience
fluctuations in its results of operations. Factors that affect the Company's
results of operations include the volume and timing of orders received,
changes in global economics and financial markets, changes in the mix of
products sold, market acceptance of the Company's and its customer's
products, competitive pricing pressures, global currency valuations, the
availability of raw materials that the Company purchases from suppliers, the
Company's ability to meet increasing demand, the Company's ability to
introduce new products on a timely basis, the timing of new product
announcements and introductions by the Company or its competitors, changing
customer requirements, delays in new product qualifications, the timing and
extent of research and development expenses and fluctuations in manufacturing
yields. As a result of the foregoing or other factors, there can be no
assurance that the Company will not experience material fluctuations in
future operating results on a quarterly or annual basis, which would
materially and adversely affect the Company's business, financial condition
and results of operations.
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